At the beginning of every year in January all homeowners in British Columbia receive their property assessments in the mail. For many homeowners, this document is believed to be what their property is worth today. For 2013, a number of homeowners were shocked that their assessments have increased even though the sales and prices have dropped in their area. Meanwhile others have received reduced or same values as previous years, myself included.
One family member was outraged when his assessment increased by $50k and expects that his taxes will be increasing accordingly. If he were selling, he would not be as concerned. I tried to explain that it’s just a piece of paper for reference but I had to end the discussion because I wanted to keep the peace. :)
For clarification, the BC Assessment Authority is a provincial Crown corporation. As quoted on their website, “Each assessment reflects an estimate of what properties would have likely sold for on a uniform date of July 1, 2012.” Thus, without the property actually having sold in the open market, the assessment is just that--an estimate formulated about 7 months ago. If the market were static there may have been more validity. For a better estimate of value today in your marketplace, you need to consult with a Realtor® who has the current information.
The real estate market in BC has seen fluctuations in values up and down, depending on the area. However, for the most part, prices have dropped overall in the last 6-8 months. These numbers can be validated by actual reported sales from the respective real estate boards. The BC property assessment is generated by mathematical formulas and assumptions used by a group of appraisers, without viewing the condition or location of the properties to establish a starting point.
Would you feel that you had a “deal” if you bought a property below the assessed value? And would you feel you paid “too much” if the price was over assessed value? The same applies if you were a Seller. Understanding how these numbers work along with the knowledge from your local Realtor® would make you feel better on either side.